Webinar Not Your Father’s CRM: Capitalize on CRM SaaS Solutions With Better Governance William Band, Vice President, Principal Analyst December 4, 2012. Call in at 10:55 a.m. Eastern time

Today: Capitalize on CRM SaaS Solutions With Better Governance The Forrester CRM Playbook guides you through the complete technology adoption cycle Today: Capitalize on CRM SaaS Solutions With Better Governance 2

Enterprises continue to invest in CRM solutions

What is CRM solution governance? “Everything that it takes to get the CRM system to run successfully.” “Governance in this new world isn’t about just updating an application anymore- it’s about how to improve the business process.”

Definition Forrester defines solution governance as : The mechanisms and processes by which an organization directs or controls aspects of its technology investments, including both strategy and functional requirements.

Agenda What’s different about SaaS CRM solutions? Roles and Responsibilities Four Governance Best Practices

Base: 1031 North American and European IT services decision-makers Nearly 70% of organizations are using, or are interested in, SaaS CRM solutions 68% Base: 1031 North American and European IT services decision-makers Source: Forrsights Services Survey, Q3 2011 7

Drivers of SaaS adoption are improved agility, and speed-to-value How important were the following benefits in your firm’s decision to use SaaS? Base: 920 packaged application decision-makers Source: Forrsights Software Survey, Q4 2011 8

What is differ about managing a SaaS CRM solution? Figure 1: Solution Governance Principles Shift As Organizations Move To The Cloud Source: November 12, 2012 “Capitalize On SaaS CRM Solutions With Better Governance” Forrester report 9

Forrester defines solution governance as the mechanisms and processes by which an organization directs or controls aspects of its technology investments, including both strategy and functional requirements. A systems integrator of cloud CRM solutions describes governance as: “everything that it takes to get the CRM system to run successfully.” Another executive takes broader view of governance: “Governance in this new world isn’t about just updating an application anymore- it’s about how to improve the business process.”   The key elements that comprise solution governance are: Governance board. The governance body consists of the appropriate business owners (e.g. sales, marketing, legal), IT owners (e.g. business analysts, project managers, developers), executives (e.g. sales director, CIO), and third-party systems integrators, all of whom provide strategic insight and direction for the CRM solution. “The role of the PMs and PMO was very important with such large scale and complicated initiatives.” says the CTO of global electrical components company. Charter. The governance charter sets the direction for the governance board, clarifies the board's mission, defines the project scope, articulates the business case, and defines the project timeline. The same CTO advises: “Defining the scope up front is very important- this way the business knows what to expect.” Project teams. A key governance component is defining the roles and responsibilities of project teams. CRM project teams include not just IT, but also appropriate business stakeholders. As systems integrators recommends that: “You need functional representation from all the different areas and the different people that the system is going to touch.” Continuous improvement processes. Governance also must account for benchmarking and continuous improvements. Forrester defines this as the proper processes for measuring progress, upgrading and improving the implemented CRM system, as well as benchmarking against overall industry maturity. Cloud solutions especially need these processes, because it is easier to make changes to CRM SaaS solutions than with traditional on-premises solutions. And SaaS vendor up-grades are continuous, which places a premium on having a tight prioritization process in place to decide which changes to implement immediately, and which ones to leave for later. A leading storage and archiving company told us: "Successful governance is the delicate balancing of competing priorities." Data management: The heart and soul of a CRM system is the customer data that it contains. If the information is no governed properly, the information will go out of date and users will lose confidence in the system. This of course drives down user adoption and negates the value the solution to the organization. A systems integrator observes that: “Data governance is going to be increasingly important as companies evolve since the CRM is going to become a core information system for businesses.” A global CRM solutions user company stresses that: “Data governance is increasingly important with the move to the cloud.” Risk management. Governance processes must address and account for concerns regarding security, data retention, and possibly regulatory approvals, to minimize risk to the organization. During our interviews we heard many times that: “Regulatory concerns should be in the conversation from the beginning.” We interviewed user companies, consultants, and vendors to distill best practices Appirio Bluewolf, Cloud Sherpas Customer Effective Deloitte Consulting Epicom Organizations Interviewed Iron Mountain Cognizant Thomson Reuters salesforce.com Schneider Electric

Agenda What’s different about SaaS CRM solutions? Roles and Responsibilities Four Governance Best Practices

Good governance requires clear roles Governance board The governance body consists of the appropriate business owners (e.g. sales, marketing, legal), IT owners (e.g. business analysts, project managers, developers), executives (e.g. sales director, CIO), and third-party systems integrators, all of whom provide strategic insight and direction for the CRM solution. Charter The governance charter sets the direction for the governance board, clarifies the board's mission, defines the project scope, articulates the business case, and defines the project timeline. Project teams CRM project teams include not just IT, but also appropriate business stakeholders. “The role of the PMs and PMO was very important with such large scale and complicated initiatives.” “Defining the scope up front is very important- this way the business knows what to expect.” “You need functional representation from all the different areas and the different people that the system is going to touch.” Source: November 12, 2012 “Capitalize On SaaS CRM Solutions With Better Governance” Forrester report

Good governance requires clear roles (cont.) Continuous improvement processes The processes for measuring progress, upgrading and improving the implemented CRM system, as well as benchmarking against overall industry maturity. Data management The heart and soul of a CRM system is the customer data that it contains. Risk management Governance processes must address and account for concerns regarding security, data retention, and possibly regulatory approvals, to minimize risk to the organization. “Successful governance is the delicate balancing of competing priorities.“ “Data governance is going to be increasingly important as companies evolve since the CRM is going to become a core information system for businesses.” “Regulatory concerns should be in the conversation from the beginning.” Source: November 12, 2012 “Capitalize On SaaS CRM Solutions With Better Governance” Forrester report

Agenda What’s different about SaaS CRM solutions? Roles and Responsibilities Four Governance Best Practices

Governance must support all four phases of solution delivery Figure 2: Solution Governance Comprises Four Stages In the Solution Life Cycle Source: November 12, 2012 “Capitalize On SaaS CRM Solutions With Better Governance” Forrester report 15

Planning includes goals, resource planning, timelines, and communications Figure 4: Include All Critical Steps To Establish Good Governance Practices Source: November 12, 2012 “Capitalize On SaaS CRM Solutions With Better Governance” Forrester report 16

Practice 1: Drive deeper IT and business collaboration during planning Planning Best Practices Planning Pitfalls Take a top-down and bottom-up approach “Mid-level managers can often be overlooked so you must take a top down and bottom up approach to governance.” Use information worker personas to guide development cycles “Use stories to guide sprints. Make sure these stories represent the whole business for everyone who is going to touch the system.” Involving business too late in the process “Have meaningful conversations from the beginning with business leaders to determine the scope of the project and what kind of role CRM is going to play in the organization.” Spending too long on key decision points “In order to do Agile well, you need to be able to make decisions very quickly and not spend too long on just one decision point.” Source: November 12, 2012 “Capitalize On SaaS CRM Solutions With Better Governance” Forrester report

Practice 2: Implement “good enough” solutions - quickly Implementation Best Practices Implementation Pitfalls Implement solutions that are “good enough” “Your organizations should not focus on building the perfect solution, but rather build a decent and sound solution that puts you in a position to quickly and easily improve it after deployment.” Be prepared to make changes quickly “Help prioritize upgrades by measuring FAQs, helpdesk feedback, and unsolicited and solicited end user feedback.” Taking the “good enough” mantra too far “Some organizations take this idea too far, and implement solutions that don’t have enough of the basic functionality already in place and/or solutions with too many bugs. Not fully testing before deploying changes Is it working the way the business wants? Does it meet their functional requirements? Include end users during testing to see if they can actually use the system. Don’t wait until the end of the project- it has to be throughout the project.” Source: November 12, 2012 “Capitalize On SaaS CRM Solutions With Better Governance” Forrester report 18

Practice 3: Embrace continuous development Continuous Development Best Practices Continuous Development Pitfalls Define a clear enhancement prioritization processes “There needs to be a structured way from the implementation phase onwards to manage that questions users are asking so that IT can track and manage requests for changes to the system. Routine meetings to review those requests must be set so you can prioritize.” Plan for closer ties with the vendor “Organizations’ help desks must make sure to coordinate ownership and processes with SaaS vendors EARLY on to avoid confusion and conflicts.” Switching immediately into maintenance-only mode. “The most successful companies are those that understand you need to continue to upgrade and maintain the product. [You] can’t just put it in and leave it there.” Ignoring the “voice of the employee” “Listening to employees can promote solution adoption by helping gauge common grievances and complaints. Of course this is moot if you do not act upon what you hear.” Source: November 12, 2012 “Capitalize On SaaS CRM Solutions With Better Governance” Forrester report

Establish prioritization processes Figure 5: Establish Prioritization Processes To Manage Continuous Development Source: November 12, 2012 “Capitalize On SaaS CRM Solutions With Better Governance” Forrester report 20

Practice 4: Adopt new approaches for vendor management Vendor Management Best Practices Vendor Management Pitfalls Learn how to negotiate the best deal “Although buyers like the incremental rollout approach that SaaS supports, they can get the best deal through planned, consolidated buying because that approach will give them volume with the vendor.” Define the right SaaS commercial model for your organization “Although most SaaS pricing today remains per-user-per-month, some vendors are moving toward transactional or usage-based models.”  Not putting in place appropriate SLAs “Ensure that the contract not only defines uptime and performance, but that it also defines who will measure it and how.” Not putting in safeguards to protect against vendor failure “Your organization should always protect itself with an exit clause, both for cause and for convenience.” Source: November 12, 2012 “Capitalize On SaaS CRM Solutions With Better Governance” Forrester report

Summary best and next practices Figure 3: Follow SaaS CRM Governance Best Practices Source: November 12, 2012 “Capitalize On SaaS CRM Solutions With Better Governance” Forrester report 22

Use the Forrester cloud CRM governance self-diagnostic tool Figure 6a: SaaS Governance Self-Diagnostic Tool Source: November 12, 2012 “Capitalize On SaaS CRM Solutions With Better Governance” Forrester report 23

Use the Forrester cloud CRM governance self-diagnostic tool ( cont.) Figure 6b: SaaS Governance Self-Diagnostic Tool Source: November 12, 2012 “Capitalize On SaaS CRM Solutions With Better Governance” Forrester report 24

Use the Forrester CRM Playbook to reduce risks and improve the odds of success 25

Related Forrester CRM Playbook Research Capitalize On SaaS CRM Solutions With Better Governance, November x, 2012 The Forrester Wave™: Crm Suites For Large Organizations, Q3 2012, July 9, 2012 Assess CRM Capabilities To Pinpoint Opportunities, June 20, 2012 Transform Customer Processes And Systems To Improve Experiences, June 11, 2012

William Band +1 617.613.6323 wband@forrester.com @waband